Texas solar incentives & tax breaks in 2026
The big news for 2026: the federal solar tax credit is gone for homeowners who buy their system. Here’s what that means — and the incentives Texas still offers — in plain English. (This is general information, not tax advice; confirm specifics with your county appraisal district and a tax professional.)
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Federal tax credit — ended for owned systems
The 30% federal residential solar credit (Section 25D) expired on December 31, 2025 under the 2025 budget law. If you buy a system with cash or a loan in 2026, you get $0 federal tax credit. The one indirect path left is a lease or PPA, where a third party owns the system and may claim the separate commercial credit — but that’s a different ownership model with its own trade-offs (you don’t own the panels). Weigh it carefully and ask a tax professional.
Texas property-tax exemption (still here)
Solar raises your home’s value — but Texas Tax Code §11.27 gives a 100% property-tax exemption on the added value from a solar energy device, so your tax bill doesn’t go up because of the panels. You claim it by filing Form 50-123 with your county appraisal district (typically by April 30 — check your county), not the IRS or state. And because Texas has no state income tax, there’s no state tax on that added value either.
Utility rebates (varies by utility)
Texas has no statewide rebate, but some utilities offer their own:
- • Austin Energy — a $2,500 residential rebate (with its solar education course).
- • Oncor-area programs — a battery-paired rebate has been offered for systems roughly 3–15 kW installed with storage.
- • CPS Energy and several co-ops have run rebate or community-solar programs — check current availability.
Rebate amounts and availability change — confirm with your utility before counting on one.
Solar buyback (your ongoing “incentive”)
With the federal credit gone, the credit you earn for exported solar matters more than ever. How it works depends on your utility — see net metering & solar buyback in Texas and, in deregulated areas, the REP buyback plan comparison.
Even without the federal credit, solar can still pay off in Texas — it depends on your roof, usage, and buyback. Run a free estimate to see your own numbers.